|Grave concerns over proposed
loan for CEB
Power and Energy Minister John
Seneviratne has solicited a US$500 million loan from an unknown
entity, claiming to salvage the CEB from its present impasse.
This move could push the country down a precipice of
international financial terrorism, The Nation learns.
The Minster had informed the cabinet of ministers that the
authorised agent, The North Face Limited, had proposed this
long-term loan at 2% simple interest per annum, payable at the
end of five years, along with the capital.
An authorisation letter from the lender, M/s. Zhong Qi Shi Mao
Investment Company to the agent however, specifies that the loan
is subjected to the issuance of a Sovereign Bank Guarantee by
the Sri Lankan Government, for the entire loan amount.
The Minister’s appeal to the cabinet to consider the loan
proposal comes in the wake of a strong warning issued by the
Central Bank Governor on January 30, on the imprudence of
considering such offers.
“It is our view that if a ministry or an organisation were to
offer a bank guarantee, it may perhaps be used to raise funds
abroad from various illegal sources, including funds connected
to terrorist financing and/or money laundering,” the letter
Meanwhile, the Central Bank has observed that neither the
authorised agent The North Face Ltd. nor the principal lender
M/s Zhong Qi Shi Mao Investments Company, are in a position to
finance such a cumbersome loan.
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